County tax increase could depend on schools

The county’s economy may be strong enough to head off a property tax increase this year, but it could depend on what the city and county schools need, county staff said Friday.

“Pretty much, we’re in a good financial position, a good budgetary position, in going forward,” Assistant Manager Clarence Grier, the county’s chief financial officer, told the Orange County Board of Commissioners at its annual retreat.

That doesn’t mean a property tax increase isn’t in the county’s future, Grier said. The county’s last rate increase was in 2008, months before the recession. The commissioners did add two cents last year to the Chapel Hill-Carrboro City Schools district tax, making it 20.84 cents per $100 in property value.

Several commissioners also expressed skepticism Friday that a proposed $100 million bond for school repairs and upgrades, plus a proposed county jail, could be ready by November. City schools officials reported thousands of dollars in long-delayed work last fall; county schools are still making their list.

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The debt on the bond would roughly equal 4.18 cents on the county’s current tax rate of 85.8 cents per $100 in property value, Grier said. The increase in the tax bill on a house valued at $250,000 would be $104.50.

The commissioners could talk again about a bond referendum March 11.

Commissioner Mark Dorosin said more voters might weigh in on a bond if it appears on November’s ballot instead of waiting until 2015 – an off-year election with traditionally low voter turnout.

Commissioner Bernadette Pelissier said a referendum this year might be unwise.

“You don’t have time to get out there and really educate folks,” she said. “I want to do a really good job ... thinking it through – what are we going to spend it on – and getting our partners engaged in the community to do the advocacy for it.”

County finance staff gave the board a starter general fund, or operating, budget of roughly $192 million Friday. Property tax revenues for 2014 could rise by $2.6 million, while sales taxes, if they don’t fall, could bring the county another $1.3 million, Grier said.

The board will have several meetings before approving a new budget by June. There may be enough money to give employees a raise, Grier said.

Recycling and education spending are the wild cards this year, he said. Commissioners Vice Chairman Earl McKee said the schools already put the county on notice that a $2 million to $3 million shortfall is possible.

The Chapel Hill-Carrboro City Schools are expecting at least 154 more students; Orange County Schools are forecasting 90 more. At current rates, that would be about $817,000 more in per-student spending, he said.

The county’s longstanding policy is to dedicate up to 48.1 percent of its annual budget to city and county schools. It is possible that share of the budget could grow to 49.6 percent next year, Grier said.

Commissioner Alice Gordon suggested a property tax increase could raise more money for the county schools. The county splits education funding equally between the city and county systems, but the city schools get an extra bump from the special school district property tax.

The county’s other unknown is how it will pay for a rural curbside recycling program next year, officials said. The commissioners will talk about their options and dates for required public hearings Tuesday at the Department of Social Services in Hillsborough.